A mortgage is financing the purchase of an apartment with a collateral guarantee in the form of real estate. The debtor uses an apartment or house, but in a situation of failure to fulfill his obligations, he cedes the right to this property to the creditor. This type of loan is practically the main way to purchase the desired housing in the Russian Federation. The financial capabilities of the person who contacts the bank play an important role in obtaining this service. The financial institution calculates a person’s ability not only to pay monthly mortgage payments, but also to provide themselves with everything else they need. Official employment is an important condition for analyzing the likelihood of loan approval. It is important for the borrower to know how much work he needs to do to get a mortgage.
What income does the bank take into account?
First of all, the official salary is taken into account; it is confirmed in the form of a 2-NDFL certificate. The manager can also take into account non-taxable income. For example, this is income from part-time employment, income from renting an apartment, a summer house, or a car.
However, in large public and private banks such income will not be taken into account without documented confirmation. For example, when renting a summer house, the future borrower is required to attach an agreement with his tenant.
Monthly payment amount
This amount is calculated taking into account the estimated price of the apartment or house, the loan term, and the interest rate. The longer the lending period, the less amount the client deposits into the account each month.
The most common approach is to calculate the client's financial ability to pay in such a way that a total of 60% of income remains for other living needs. Thus, for a salary of 25,000 rubles, the bank will offer a monthly payment of no more than 10,000 rubles.
The regular contribution must be divided by a factor of 0.4, after which the client’s salary is obtained. In rare cases, banks approve loan terms when this indicator exceeds 60%. Each situation is always considered strictly individually.
Minimum income
There is simply no minimum income indicator; legislators have not established such a framework.
Credit institutions independently decide whether to lend or not lend funds to the borrower. Simply, the salary must be adequate in relation to the amount of the mortgage. Example
: The mortgage amount is one million rubles, the average interest rate in the Russian Federation is 12.5%. And for example, a young family decided to receive this amount for 5 years. Using a mortgage calculator, it became clear that the monthly payment would be 22,498 rubles. Now we must find out how much the family must earn to pay such a monthly amount. Simply multiply this payment by 0.4, we get the amount of 56,245 rubles. It turns out that the family needs to earn 56,245 rubles in order to pay the bank a monthly amount of 22,498 rubles.
Length of work experience for positive mortgage approval
Experience is the second proof of the client’s creditworthiness, stability and reliability. A large number of entries in the work book with short periods of work at each place will become a real problem for the positive attitude of the banking institution towards the applicant. In most cases, this is a reason for refusal.
At the time of applying for a loan to purchase residential real estate, a person must have worked at his last job for at least six months, and the total length of service over the last 5 years must be at least 12 months. The borrower confirms this fact with pages of the employment contract or work book, each of which is certified in accordance with all the rules by the employer.
Benefits are provided to clients who are members of the salary project at the bank to which they have submitted an application. In such a situation, the financial institution allows a reduction in the requirements for the borrower’s length of service. Even 3 months of work in one place will be a satisfactory factor when analyzing a loan application.
Sometimes a person desperately needs to get approved for a mortgage, but his work history and official income are minimal. For example, a spouse has been on maternity leave for a long time, and the spouse was forced to change jobs. At the same time, there is a need to increase living conditions. Many borrowers do not know whether to rely on bank approval in such a situation. Most likely, the bank will refuse.
Only after a 6-month period of continuous work in one place or 4 months for a salary client can you count on a positive decision from the bank.
There is no way to get a mortgage for a wife who is on maternity leave. During maternity leave, a person does not receive income from his salary; in this case, the length of service does not count. An exceptional case may be when the wife provides legally documented evidence of additional income.
If you have no experience, there is the “Two Documents” program
If it is impossible to document the existence of experience or it is absent altogether, then you can take out a mortgage under the “two documents” program. Many banks operate under such a program and all have one thing in common - the availability of an amount for a down payment of at least 35%, or even 40-50% of the cost of the purchased home. According to the terms of this program, you can present your passport and another document (driver’s license, SNILS card) to the bank, and that’s enough. But in reality, the financial institution will in any case check the applicant and check all possible data with the employer indicated in the application form. Despite the apparent simplicity of the difficulties, obtaining a mortgage under such a program can be a way out of the situation.
Banks will certainly offer more stringent lending conditions to borrowers with minimal work experience:
- increased interest rate;
- shorter period for debt repayment;
- issue a loan amount less than specified in the application;
- require additional collateral for the loan.
Even if you have sufficient experience, the client’s profession (how quickly he can find a new job if necessary) will play a big role in making a decision on a loan.
The place of work is also taken into account - with a high risk of loss of income (gambling business, small enterprises, real estate agencies).
Perhaps you were looking for:
- how much work do you need to do to get a mortgage at VTB;
- how long do you need to work to get a loan from VTB;
- how long do you need to work to get a loan from VTB;
- how long do you need to work to get a loan from VTB;
- how much work do you need to do to get a mortgage from VTB;
- how long do you need to work to get a loan from VTB;
- How long do you need to work to get a mortgage from VTB?
Is it necessary to deposit my own funds for the apartment into a bank account?
How to increase your chances of getting a mortgage approved
There are ways to increase your chances of loan approval:
- Attracting a co-borrower. In this case, you can attract no more than three people. Their income is also subject to analysis.
- Relatives often act as co-borrowers, but this is not necessary.
The client's spouse becomes a co-borrower without fail. An exception applies to the case if a marriage contract is concluded between the spouses, establishing the division of ownership of the property. If the second spouse is not a citizen of the Russian Federation, he may not become a co-borrower.
When a co-borrower has a certificate for preferential purchase of real estate, he receives ownership of the loaned housing.
All requirements that apply to the client applying for a mortgage also apply to the co-borrower.
Borrower's citizenship and mortgage loan
Today, having a Russian citizen's passport is not a prerequisite for mortgage lending in many commercial banks. The borrower can be any solvent individual or legal entity who provides all the necessary information about income.
If a citizen of a foreign state has temporary registration on the territory of the Russian Federation and a work permit, then a mortgage loan is issued in the same manner as for Russians.
Mortgages without Russian citizenship are issued for a period of 5 to 25 years at an average interest rate of 14% per annum.
A down payment for foreigners is required and its amount is usually 1525% of the cost of the proposed purchase.
The borrower must also insure the purchased property, since it is the subject of collateral. And although insurance is voluntary, if the client refuses, the loan rate immediately increases by 2-3%.
Your loan has been approved!
The maximum possible loan amount is determined based on the borrower's income. The loan payment is calculated so that it does not exceed 40% of his income. It is unlikely that you will be able to get a mortgage without proof of income. The bank will definitely refuse the client if it is impossible to confirm the status of a tax resident of the Russian Federation.
State programs with subsidies
In 2021, the state offers three types of subsidized programs:
- mortgage for a family with two or more children. It is important that the second child is born no later than 2021.
- purchase of residential property in rural areas. The exceptions are Moscow, Moscow region, St. Petersburg.
- increasing the mortgage payment period. In this case, the overpayment of the total amount will also increase.
Some conditions for obtaining a mortgage loan from different banks may differ, including the approach to analyzing work experience. Let's consider the requirements of the country's largest banks for approving a residential mortgage.
How much do you need to earn to get a mortgage?
Mortgage interest rate today
No matter how hard our authorities try to reduce mortgage interest rates to 8%, some programs have recently reached 10%. For standard mortgage programs, interest rates vary between 15% in rubles and 13% in dollars-euro. Despite the fact that rates did not drop to the desired 8%, and for some reasons they cannot drop so sharply, but still thanks to the reduction in the refinancing rate by the Central Bank of the Russian Federation (since the beginning of 2010, the Central Bank of the Russian Federation has reduced the refinancing rate 14 times - to record 7.75%), rates on mortgage programs decreased by 1.5-2%.
In addition, we recall that during the crisis there was a sharp increase in the down payment - 30-40%. Today, the down payment, almost the same as before the crisis, is 15-20%. These measures could not leave potential clients indifferent. “We note not only an increase in customer applications, but also the positive dynamics of mortgage transactions. Over the past months of this year, the number of mortgage transactions has doubled compared to the same period last year,” says General Director Maria Litinetskaya. The head of the VTB24 press service, Anna Amelkina, also notes an increase in demand for mortgage loans. “In the first half of 2010, more than 7 thousand loans were issued in the amount of 11.3 billion rubles. And in 2009, the annual issuance rate was at the level of 11.7 billion rubles.”
According to Natalya Konyakhina, Regional Director of DeltaCredit in the Central Federal District, the reason for the demand for a mortgage loan was not only a decrease in interest rates, but also the fall in price of real estate over the past year and a half.
Despite the above positive data, Marina Melkonyan, director of the private and corporate lending department at Penny Lane Realty, still believes that people are not so willing to take out a mortgage. “Of the total number of requests, about 12% reach real transactions. This is due to the fact that at present the financial situation of the main consumer of credit products - the middle class - has not yet reached the levels of previous years. People are interested in credit conditions, but are not yet ready to take out a mortgage due to their own instability, sharp fluctuations in the foreign exchange market, and also expecting more favorable conditions in the near future. I think that mortgage transactions will grow, their number will return to pre-crisis levels in about a year,” she says.
It's all about the money
In fact, no matter how much mortgage interest rates are reduced, it all comes down to money. First of all, a person who wants to buy a home faces the question “How much should I earn in order to take out a mortgage?!” Many people say from hearsay that you supposedly need to earn at least 70 thousand rubles per person. But it's not quite like that. This indicator depends on the region in which you plan to purchase an apartment, on the cost of the apartment, on the number of family members, and on the specific lending program. For example, those who fall under the Young Family program are provided with benefits. Interest rates for this program are 10-12%. “Under any mortgage lending program, the ratio of the mortgage payment, as well as other obligatory payments, to the borrower’s income cannot be higher than 60%, in some banks – 35%,” notes Marina Melkonyan, director of the private and corporate lending department at Penny Lane Realty. As Alexey Shlenov notes, the general director today banks are again lending, for example, to representatives of creative professions, borrowers with income not confirmed by certificate 2 of the personal income tax. The age range is from 21 to 60 in men and up to 55 in women. But some banks have lowered the age limit to 18 years.
Illustrative examples
Vice-President of the Euroservice Group of Companies Denis Gorshko believes that a family’s monthly income, documented, varies in the range of 80-120 thousand rubles, if we take into account a one-room apartment of a standard layout in a regular Moscow area. “Today, not all Muscovites have the opportunity to purchase a mortgage on such terms. The category of those who have such an opportunity is only a few percent. But for such people, the housing issue, as a rule, has already been resolved. Moreover, such income allows you to get rid of debt only after 15-20 years.”
“Let’s take as a starting point a 1-room apartment with an area of 35 square meters and the borrower having a minimum down payment of 20% of the cost of housing for a period of 25 years,” says Dmitry Demeshko, Head of the Department of Alternative Sales Channels at Bank Societe Generale Vostok (BSGV). — The approximate minimum cost of such an apartment in Moscow will be 4,375 thousand rubles (at the rate of 125 thousand rubles per square meter). To obtain a mortgage, the monthly payment should not exceed 40-50% of monthly income. Thus, if we limit this level to 45%, then the monthly income should be 100,000 rubles per month per family (since spouses can act as co-borrowers). The monthly payment will be 45 thousand rubles.” As for the region, it is no secret that housing costs less outside of Moscow. Moreover, the further you go, the cheaper it is. For example, if in Moscow you can buy a two-room apartment for 7-9 million rubles, then in Tver, where it takes only 3-4 hours by train from Leningradsky Station, 3 million rubles.
So, if you purchase an apartment on a mortgage loan for a period of 25 years, based on the average cost per square meter of 45 thousand rubles, the cost of the apartment will be 1,575 thousand rubles, the loan amount will be 1,260 thousand rubles (20% down payment), the monthly payment will be 16 thousand rubles, the required income is 40 thousand rubles.
To take out or not to take out a mortgage?
As mentioned above, many borrowers are afraid not only of “How much should I earn to take out a mortgage,” but also of “Will I have to pay rent for almost my entire life?” If we approach this issue more simply, we will note that we will either pay monthly for a rented apartment from 20 to 40 thousand rubles per month, depending on where the apartment is located, how many rooms, etc. etc., or we will pay for the mortgage, knowing that sooner or later, according to all the documents, it will become ours, that is, it will become our property. In addition, we must also take into account the fact that an apartment in Moscow, which today costs 9 million rubles, in 10 years may cost 5-6 times more. That is, by taking out a mortgage, the borrower does not lose, but rather wins, both morally and financially.
But there is another option on how to purchase housing with less losses. For example, if you have in your hands the amount for which you can actually buy an apartment in the region today, without taking out a mortgage, then buy in the region and continue saving for an apartment in Moscow. While you save, the price of an apartment in the region will also rise. Therefore, after correct calculations, it will be possible to sell an apartment in the region, break the piggy bank and buy an apartment in Moscow.
Author:
Sugra Gadzhieva
Bank requirements
Sberbank, Rosselkhozbank, Gazprombank, Bank Vozrozhdenie require a minimum work experience of 6 months with a total work experience of 12 months. The exception is Bank Vozrozhdenie, which only considers total work experience from 2 years. Raiffeisenbank reduces the minimum term to 3 months.
Uralsib, Bank Otkritie, SKB-Bank and UniCredit are more loyal, they provide a term of 3 months. At the same time, UniCredit needs a total of 2 years of experience. Only VTB and Binbank allow their clients to have 1 month of experience at their last job with a total experience of 12 months.
As a result, it becomes clear that continuous work activity must be carried out for at least 12 months.
Everything becomes simpler if the future borrower is a participant in the salary project at the bank to which he submitted an application. A financial institution always shows a certain degree of loyalty to salary clients. If at least 3 payments from the employer were transferred to the debit card, then the client has the right to count on a positive attitude from the banking institution.
What is also taken into account
It should be understood that banks consider not only financial income and experience. The following points can positively influence the decision of a credit institution:
- Permanent registration.
- Family composition.
- The level of education.
- Person’s employment (individual entrepreneur or hired worker).
- Availability of property.
- Credit history.
- The presence of any other obligations.
If the borrower is unable to prove the level of his salary and the amount of work experience, then VTB 24 and Sberbank banks can provide funds using the second documents. But in this case you will have to make a huge down payment.
Credit history
Another factor influencing the bank’s decision to approve a mortgage is the client’s credit history.
Its negative characteristics will undoubtedly be the reason for refusal of a loan. This program was created to record the frequency and size of loans taken by a person. CI includes information on any movements, type of closing or opening of accounts, financial payments, applications, bank decisions and work of debt collectors.
A credit history makes it much easier for a bank to analyze the reliability of a potential client. All information is stored by the united credit history bureau, and its formation takes place on the basis of microcredit institutions or the banks themselves.
If you need information about the storage location of a specific history, you can request a certificate from the Central Control Commission. The service is paid, it costs 300 rubles. The document identifies the bureau that collects and stores the credit history of a particular person.
A positive credit history may contain information about one or more loans that are repaid on time, the presence of already closed credit projects and the absence of fines.
Important! A positive credit history indicates a person’s reliability and financial stability.
If the certificate is negative, information about late payments and penalties against the borrower will be indicated. Until such a loan and all fines are repaid, it is not recommended to apply to the bank for a new loan.
To have a positive credit history, you must adhere to the following rules:
- repay the loan regularly, without delays;
- close the loan in a timely manner;
- take out small credit loans to improve your credit history.
Necessary documents for obtaining a mortgage
The original and copies of all pages of the work book or employment contract are required. Each page must be certified by the director and the organization’s seal is affixed. Today, all information is recorded by the State Services portal. In certain controversial situations, the bank may request the following documents:
- Statement and orders for appointment to a position;
- Certificate from the financial and personal register;
- Archival documents.
The following documents are attached to the work book:
- Borrower's passport;
- Salary certificate in form 2-NDFL;
- Contract of employment.
Important! The bank's security department will analyze the organization where the client works, his skill level and position.
All confirmatory actions are carried out in accordance with the Labor Code of the Russian Federation.
Is it possible to get a mortgage without proof of income?
Despite the fact that getting a loan without an income certificate is very, very difficult, it can still be done. For example, if the borrower’s salary is transferred through one of the banks, then even without certificates they will know about the regularity and size of income.
The inconvenience, however, is that you will be able to use the credit conditions of only one bank.
Another possibility of obtaining a mortgage without proof of income is making a large down payment .
If it amounts to more than 30% of the borrower’s own funds, then the bank will consider the application. In this case, a call will follow to the applicant’s work to confirm the information recorded from the client’s words about the availability of his workplace and salary.
Mortgage after maternity leave
According to the laws of the Russian Federation, maternity leave is included in a woman’s total work experience and is not considered as a break in work activity.
In reality, the bank accepts an application for consideration provided that income accruals have been received on the salary card over the past four months. There is a possibility of finding a banking institution with a more flexible approach to this situation, where the application is considered immediately after the end of the maternity leave.
The age of the children is also taken into account. The older the child, the higher the likelihood of a positive solution to the loan issue.
The law of the country does not include clauses prohibiting the approval of a mortgage for a person on maternity leave. If the benefit amount allows for loan payments, spouses can count on a positive decision.
Where can I get a mortgage with a minimum experience?
What should people do if their total experience is less than a year, but they want to purchase an apartment with a mortgage? There are many options for them to solve this problem. For example, they can become participants in a salary project (this is a service provided by banks for companies, in which the bank transfers salaries to employees onto debit cards issued by it).
Another option may be the bank’s loyal attitude towards the borrower. Let’s say a person has worked for 10 or 11 months, but the bank’s conditions are at least a year of work, in this case the bank agrees to a meeting when issuing a mortgage and can make a positive decision regarding the borrower.
A borrower, even at the beginning of his career, has a good chance of getting a mortgage. In this case, he will need to issue it using two documents, that is, provide a civil passport and some other personal document (IIN, SNILS, international passport or driver’s license).
This is done for the purpose of concluding a comprehensive insurance contract. This type of insurance is issued to help the borrower fulfill his obligations in the event of unforeseen circumstances (for example, a person loses his job).
If a person has always worked under a civil contract, then in order to obtain a mortgage he will need to provide a copy of it, and if the client’s income level is acceptable to the bank, then he can count on a positive decision. Such an agreement is considered as an auxiliary source of income. These applications are handled by the banking organization Globex. This bank has many profitable programs for mortgage lending.
Entrepreneurs and freelancers have a real opportunity to take out a mortgage secured by existing property. To do this, they submit a document for real estate. The loan issued by the banking organization will be used to purchase a new home. If people do not have real estate, then they can take out a mortgage with a significant down payment to prove to the bank their solvency.
Currently, the mortgage loan market is quite saturated and almost any person who has worked, even for a short time, but has a satisfactory level of income, can count on a positive decision, under certain lending conditions.
After you have received the answer to the question of how long you need to work to get a mortgage, you should not forget about other points that influence the bank’s decision
In addition to their work experience, bank employees take into account the borrower’s marital status, level of education, citizenship and registration, and features of the credit history.
